3.1 Social and Solidarity Economy in Italy

3. THE ITALIAN APPROACH TO SOCIAL ECONOMY AND COHESION POLICY

Italy has a long-lasting experience in implementing integrated local development initiatives concerning social economy and cohesion to foster Sustainable Human Development at the local level. For this reason, in this section we present an overview of the Italian approach and experience in both SSE and STC, by presenting both their core policies and actors, as well as a characterization of their distinctive features and core models that make them significantly valuable for replications in other contexts. This overview is based on the combination of extensive desk-based analysis of the academic literature, policy documentation and institutional reports, along with the conduction of semi-structured interviews with 18 key Italian informants in each field (see Appendix 1). While the former has provided the general background on the institutional setting and policy approach, the latter have provided in-depth insider information on the Italian distinctive features on SSE and STC, with particular reference to real-world insights on operational processes and mechanisms on the ground.

3.1 Social and Solidarity Economy in Italy

Italy has a long-lasting tradition in SSE. The first organizations date back to the Middle Ages, namely the catholic brotherhoods, the “Misericordie” in Florence, in 1244, and the “Monti di Pietà” set up by Franciscan friars in 1462, in Turin, which provided credit to people in need. Overall, in 2017 the non-profit sector in Italy totals 350.492 organizations and employs 844.775 people (ISTAT (2019). Even though not all these organizations can fall inside the definition of SSE, Italy is nowadays globally recognized as one of the countries where Social Economy is more developed (see Table 1 for the list of the main SSE organizations currently present in Italy).

Table 1. Main organizations of the SSE sector in Italy

LEGAL ENTITY Association TOTAL NUMBER 292.174

Foundation

7.509 Cooperatives (non Social) 43.049 Social Cooperatives 15.600 Other no-profit organizations 28.149 TOTAL EMPLOYEES TOTAL VOLUNTEERS 154.908 5.020.810

98.164 62.211

763.586 428.713 130.921 - 43.781 401.957

Source: Authors’ adaptation from Barco Serrano et al. (2019)

These numbers show that SSE organizations in Italy are not a residual phenomenon but rather, a driving force of social, economic and human development. SSE organizations in Italy have developed thanks to the interplay of different factors:  the growing difficulty in providing answers to social needs through centralised monetary disbursements

 the growing differentiation of needs (at all levels: by age group, gender, geographical area, etc.) which has gradually made it more and more difficult to meet the needs of the standardised responses offered by the public administrations  the externalisation of services from local authorities to social enterprises and other non-profit organizations  increased interest by all economic actors on a more sustainable economic development Italy is also renowned for the gradual introduction of a solid legal and enabling policy framework especially in the field of social enterprises (see Table 2).

Table 2. Legal evolution of social enterprises in Italy

YEAR TYPE OF LEGAL ACT

1988 Constitutional Court ruling 396.

1991 Law 381 (on social cooperatives).

1991- 2000 Law 266/1991 on Voluntary Organisations, Legislative Decree 460/1997 on ONLUS, Law 383/200 on Social Promotion Associations.

2005- 2006

2012- 2013 Law 118/2005 and Legislative Decree 155/2006 (on SEs).

Legislative Decree 179/2012 and Decree of the Ministry of Economic Development of 6 March 2013.

2016 Law 106/2016 (Reform of the Third Sector, SE and Universal Civil Service).

2017 Legislative Decree 112/2017 (revision of the previous legislation on SEs). DESCRIPTION – MAIN AIM Established unconstitutionality of Law 6972/1890 (Crispi Law) providing that welfare activities had to be organised exclusively by public entities. Acknowledged a new cooperative form explicitly aimed at pursuing the general interest of the community (A-type provides social, health and educational services; B-type integrates vulnerable persons into work).

Progressive recognition of the potential of associations and foundations to run economic activities that are consistent with their institutional activities.

Allowed the establishment of SEs under a plurality of legal forms (association, foundation, cooperative, shareholder company) and enlarged the set of activities of SEs. Introduced a total distribution constraint and asset lock.

Established that mutual aid societies must register in the SE section at the Companies Register.

Re-launched the SE by introducing a new qualification. Established its non-profit purpose and placed the social enterprise within the third sector. Favours the development of social enterprises other than social cooperatives. Repealed Legislative Decree 155/2006 and introduced a new discipline, which provides for partial distribution constraint, more inclusive governance, enlargement of the sectors of activity and exemption from corporate tax on retained profits.

Source: Borzaga (2020, p.34)

All SSE experiences in Italy are relevant. However, here we focus on the historical evolution of the following prevailing models for their role in characterising the SSE ecosystem in Italy.

The relevance of cooperative enterprises

The cooperative movement in Italy is mainly based on two main traditions: the catholic one and the laicsocialist one. Italian cooperatives began in 1884 in Turin and, since then, they have developed extensively over time except the period 1922-1947, when their growth was slowed down by the Fascist regime opposing to any form of organization. The 1948 Italian Constitution (art. 45) specifically recognized the social function of cooperation and the need to promote cooperatives. In the 1950s many cooperatives were set up as construction and housing cooperatives engaged in the post-war reconstruction. During the 1970s cooperatives increased in number, became bigger and more professionalized and formed consortia and groups with other companies. In the 1980s many cooperatives started providing health, social and educational services, as well as being active in the field of work integration. A strong drive to the development of cooperatives was the formalization of social cooperatives in 1991 (Borzaga and Ianes, 2006). In 2015 there were 59.027 active cooperatives in Italy employing 1.151.349 people (7.1% of the total

people employed by companies) and reporting an added value of €28.613 Mil (4% of the total added value of companies). The high presence of cooperatives in Italy contributed to foster an enabling ecosystem for SSE in the country. Cooperatives demonstrated the relevance and feasibility of production models that promote social justice. Moreover, thanks also to their close relation to public authorities and capacity to collaborate with local stakeholders they brought innovations in public service delivery, as well as in the field of work integration.

The role of Work Integration Social Enterprises (WISEs)

Within the SSE sector in Italy, it is worth noting the relevance of Work Integration Social Enterprises. Such social enterprises produce and sell goods and services by employing disadvantaged people. The first WISEs were regulated as B-type Social Cooperatives by the Italian law 381/1991 which also establishes the typologies of disadvantaged people that can be targeted. The relevance of the WISEs experience in Italy is that some of them evolved from being organizations in which disadvantaged people could find employment (and therefore limiting their impact only to those employed) to becoming an important player into a wider system aimed at promoting active inclusion policies. In this respect, WISEs develop both capacity assessment and training skills in order to assess the work capabilities of disadvantaged people, providing them with targeted training that answers to the needs of future employers and creating agreements with future employers in order to enhance their placement. Many WISEs have thus developed specific skills and methodologies, focusing on particular sectors of the economy. For example, the Download Cooperative- Albergo Etico4 in the hospitality sector, QUID in fashion5 , Giardineria Italiana6 in gardening, among others. Moreover, WISEs are in many cases highly entrepreneurial and less reliant on public tenders than A-Type Social Cooperatives.

The development of Social Enterprises

As a concept, Social Enterprises in Italy trace back to the first social solidarity cooperatives in the 1980s, which were then regulated in 1991 as ‘Social Cooperatives’ (law 381/1991). Law 381/1991 identified two main types of Social Cooperatives. The A-type delivering health, educational and social services, the B-Type providing work integration for disadvantaged people. In 2006, Social Enterprises have been introduced as a legal category (law 155/2006) to give the possibility to organizations with different legal forms (cooperatives, limited liability companies, foundations, etc.) to be recognized as Social Enterprises if operating in certain fields and complying with certain requirements (Borzaga and Santuari, 2000). However, the 2006 law did not bring to a relevant increase in the number of social enterprises since it did not provide sensible advantages to the organizations qualifying as social enterprises. For this reason, the Third Sector Reform in 2016/2017 brought relevant changes to the law on Social Enterprises (SEs), providing them with some advantages , as

4 https://www.albergoetico.it 5 https://shop.progettoquid.com 6 http://www.giardineriaitaliana.it

well as enlarging their field of activities. Data shows that in 2017 there were 102.0007 Social Enterprises in Italy (social cooperatives, ex-lege social enterprises, associations and foundations with market activity) accounting for almost 900.000 paid workers and an annual turnover of over €42.700 Mil (Lori, 2019). The reason for such flourishing of social enterprises, especially in the form of social cooperatives, is due to cultural, historical and economic processes which saw these organizations co-evolve along with the welfare state, as public authorities increasingly outsourced services to SEs (Testi et al., 2017). The relation between SEs and public authorities at the different administrative levels is important. As Borzaga et al. (2017) show, based on the data collected by ISTAT in 2011, SEs in Italy work mainly with public institutions. In fact, 65% of their aggregate revenue in 2011 came from working with public institutions while 28% from working with private actors (Borzaga, 2020). An interesting model stemming out from the development of social enterprises is the Consortium of Social Enterprises. Consortium of social enterprises have the objective of supporting the development of the social enterprises that are members of the consortium by providing them with qualified services (such as marketing, project writing, participation to tenders etc.), as well as coordinating their actions on specific activities or to seize opportunities. Consortiums also give the possibility to include, under the same governance structure, different organizations. For example, consortiums can be also formed to implement specific local development projects implemented by different SEs and local actors (for example see case-study “Sale della Terra” in Section 4).

A rich SSE ecosystem capable of innovating

Due to the long and consistent presence of SSE organizations, the Italian ecosystem has become rich in actors that play a key role in strengthening and innovating it. For example, in 2001, representative bodies such as AGCI, Legacoop, Confcooperative formed the “Alliance of Italian Cooperatives” , grouping 43.000 Italian cooperatives. These associations promote the development of the cooperative model and perform advocacy actions towards policy-makers. Another example of the rich SSE ecosystem is the presence of the Forum del Terzo Settore (Forum of the Third Sector), an association that represents 89 national organizations which in turn represent 141.000 local organizations. It has the role of advocating for the Third Sector to the Italian Government and other institutions, coordinate the work of the different netwo rks of associations and promote the Third Sector and its values. The Italian ecosystem has also seen the emergence of banks that have a specific focus on SSE organizations such as Banca Etica and Banca Prossima, as well as financial instruments created to develop social enterprises such as the social bonds provided by UBI Banca. The ecosystem of SSE globally, and in Italy, has rapidly developed and diversified in the last 10 years compared to the previous decades. This acceleration was boosted by the increasing global challenges that the Italian society has been facing (aging, climate change, inequality etc.), which urged private actors to find solutions to global problems at local level. Moreover, specific initiatives launched by organizations such as the European Commission aimed at supporting such private actors by creating enabling conditions for their development. For instance, the Social Business Initiative (SBI)8 launched in 2011 by the European

7 The figure includes 15.770 social cooperatives, 600 ex-lege social enterprises, 86.091 associations and foundations engaged in market activity with at least one employee. It therefore overlaps with some of the figures present in Table 1. 8 See https://ec.europa.eu/growth/sectors/social-economy/enterprises_en.